Lately there has been increased media coverage surrounding the United Airlines' recent pension default. The New York Times, in particular, has stressed in a few articles that Congress needs to take steps to regulate the pension process in order to rid it of the greed and waste that helps drive these companies' pension plans to default. United's employees, today's editorial says, collectively lost $3.4 billion in benefits in the default, and they were not "simply victims of a bad stock market and low interest rates." Instead, the unregulated pension system allowed money managers to make a number of risky investments, which eventually led to the collapse of their private pension plan, and an added burden on the Pension Benefit Guaranty Corporation. The New York Times also ran this story, "How Wall Street Wrecked United's Pension," on Sunday.

The administration has been using the release of the mid-session revenue and the report of a lower deficit as an excuse to squawk about their excessive tax cuts causing economic growth. Simply because deficit projections were lowered to $333 instead of a whopping $427 billion for FY 2005 does not mean that Bush's tax policies have proven to be pro-growth. Instead, much of the reason for the deficit reduction lies in the fact that revenue levels are up in 2005, mainly when it comes to corporate taxation. A number of particular tax laws has led to an increase in tax collections which will prove to be more temporary, according to many analysts, than the administration is currently admitting. The expiration of a specific business tax cut along with strong capital gains returns and a concentration in nonwitheld taxes led to a 2005 surge in revenue. The surge remember, is still lower than levels of revenue which were predicted for 2005 back in 2002. To read more on how the 2005 revenue collections have affected predicted deficits, see this CBPP report.

The Bank for International Settlements released their annual report yesterday. In the report (see also a summary), they issued warnings on economic imbalances, the U.S. budget deficit, and dollar depreciation. The report found that the world economy is marked by increasing internal and external economic imbalances. These imbalances raise serious questions about future global growth and financial stability. The report said, "One simply cannot ignore the number of indicators that are now simultaneously exhibiting marked deviations from historical norms," and went on to warn that the U.S. budget deficit was an increasing concern of global importance. The report basically stated that without any sort of budgetary discipline, the continued decline of the U.S. dollar against other currencies appeared "inevitable." The report also stated that the U.S. deficit "expanded to a record high as a proportion of GDP [almost 6%], and this in spite of a reduction in the effective real value of the dollar of more than 20% from its peak in early 2002.... It is unprecedented for a reserve currency country to have a current account deficit of such magnitude." The high deficit has resulted in the global financial system seemingly becoming increasingly prone to various sorts of financial turbulence. The Bank of International Settlements is warning Bush and Congress that if deficits continue to rise, there could be serious consequences. Given the current fiscal health of the U.S. economy, now is not the time for Congress and the President to be considering any extremely expensive legislation, without figuring out a way to pay for it.